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International Issues Update

By May 12, 2023No Comments

ON OUR DESKS

  • Participating in the AIM for Climate Summit 
  • Analyzing House Ways and Means Committee Hearing on Securing Supply Chains
  • Identifying opportunities in the Export-Import Bank’s China & Transformational Exports program

These are just examples of client service. How can we help you? Email any IBC counsellor for assistance or consult our issues list to find the expert you’re looking for.

WIBC DISCUSSIONS

Upcoming WIBC events:

  • May 17: Assistant U.S. Trade Representative for Agriculture Affairs and Commodity Policy Julie Callahan, The Administration’s agriculture trade priorities

REMINDER: Our client portal, WIBC calendar, and other resources are available at redflag.global/washington.

WIBC discussions are open to WIBC members only. Not a member? Contact Alix for membership inquiries.

YOU NEED TO KNOW

China 

The Biden administration tried to establish new lines of communication with Beijing this week following a period of frozen high-level interactions after the spy balloon incident in February. An icy meeting on May 8 between U.S. Ambassador Burns and Foreign Minister Qin came as the PRC’s defense minister refused to meet U.S. Secretary of Defense Lloyd Austin in Singapore. The Chinese foreign ministry demanded that the Biden Administration “form a correct perception of China, return to rationality” before Beijing is willing to establish more regular contact. National Security Advisor Sullivan then met with high-ranking PRC official Wang Yi for two days in Geneva, an interaction described as a “candid, substantive, and constructive discussion” covering Russia-Ukraine, Taiwan, and the bilateral relationship. 

Reports this week indicate that the State Department put multiple China-related sanctions, including export controls on the Chinese semiconductor industry and sanctions on persons linked to Uyghur genocide, on hold to avoid further deterioration in relations. 

Meanwhile, Chinese national security officials have continued a crackdown on western consulting and due diligence firms on allegations of espionage.  China alleges the firms improperly obtained sensitive data on state-owned enterprises. China recently adopted an espionage law, effective July 1, that expands the definition of espionage to include many common corporate information-gathering activities. 

In Congress this week, legislators introduced or announced a number of China-related bills focused on outbound investment reviews (HR 3136), tools to oppose Chinese economic coercion (HR 1135), confronting China’s use of the developing country status before the WTO (S.Res.202), alleviating double taxation between the United States and Taiwan (Senate drafting), and U.S. military deterrence in the region (Senate draft). Elements of these bills are likely to become the foundation of the new China Competition legislative package announced by Senate Majority Leader Chuck Schumer (D-NY) last week.  Also this week, the Congressional-Executive Commission on China released a report recommending that the Administration use existing authorities to sanction Hong Kong judges accused of violating basic legal rights.  

Contact: Chris Benscher, Ethan Knecht, Pat Sheehy

Trade

As trade officials met in Singapore for the third negotiating round of the Indo-Pacific Economic Framework (IPEF) from May 8-15, USTR issued public summaries of the proposed trade pillar text, providing details on the provisions being discussed on digital trade, labor, environment, technical assistance and inclusivity.  USTR indicates that the digital trade provisions address data protection, consumer protection, and artificial intelligence.  The American Association of the Indo-Pacific (AAIP), a business group advocating on the IPEF, issued on May 8 detailed recommendations for the negotiation, stressing the need to incorporate elements from the United States-Mexico-Canada Agreement (USMCA) on digital trade.  The United States will be hosting an IPEF Ministerial on May 27 in Detroit to advance progress on the framework’s four pillars.

At a House Ways and Means Committee field hearing on trade on May 9, Committee Chairman Jason Smith (R-MO) accused the Biden administration of trying to work around Congress to create “so called frameworks that lack the force of law” and said there needs to be “a smart and strategic decoupling from China.”   

House and Senate trade committees are currently strategizing over the approach to advance trade legislation including renewal of the Generalized System of Preferences (GSP) and the Miscellaneous Tariff Bill (MTB).   It remains uncertain how long this trade bill will take to negotiate, but political differences remain over country eligibility criteria in the GSP and finished products from China benefiting from the MTB, among other issues.  Unrelated legislative hurdles will likely delay any action until the fall at the earliest.  

Contact: Stephen Ziehm,  Chris Benscher

Latin America

Chile’s election for a constitutional assembly, which will revise the country’s new constitution before it is put to a referendum later this year, resulted in right-leaning parties winning 34 of 51 seats in a blow to left-wing President Gabriel Boric. This will likely ensure that the new constitution will maintain many of the current constiution’s pro-business policies. 

As the government of Ecuador’s President Guillermo Lasso celebrated the signing of its Free Trade Agreement with China, Ecuador’s legislature proceeded with the impeachment of the president. A final vote is due later by the end of this month, although President Lasso has suggested that he may try to call early legislative elections to undermine a potential impeachment, which would throw the country further into crisis.

Argentina’s government is also facing an increasingly difficult economic situation, with the Central Bank almost completely depleted of reserves while the country faces a drought and looming recession. The economic situation prompted Brazilian Finance Minister Haddad to raise concerns on the sidelines of the G7 finance ministers meeting with Treasury Secretary Yellen about cooperating to stabilize the Argentine economy.

Contact: Ethan Knecht

Quick takes

  • Secretary of State Antony Blinken announced the retirement of Deputy Secretary of State Wendy Sherman.
  • The Treasury Department issued guidance on the domestic content bonus under the Inflation Reduction Act (IRA) for clean energy projects and facilities that meet American manufacturing and sourcing requirements for iron and steel. 
  • The White House issued policy recommendations on energy and mining permitting reform, with White House Senior Advisor John Podesta highlighting priorities for Congress to include in permitting legislation, including cutting duplicative and burdensome reviews.
  • The State Department held a meeting with the Argentine government and the private sector as part of the Minerals Security Partnership (MSP) to advance regional collaboration on critical mineral investment projects. 
  • Senate Finance Committee Chairman Ron Wyden (D-OR) released a staff report with findings on an investigation into pharmaceutical industry tax practices, alleging the use of offshore subsidiaries to avoid taxes on profits.  

NOTICES, BILLS & HEARINGS

Federal Register Notices

Newly Introduced Legislation

House

  • H.R.3259 (Quigley, D-IL) Would make Real ID benefits available to Ukrainians present in the United States. 
  • H.R.3246 (Meeks, D-NY) Would authorize sanctions against any foreign person endangering the integrity or safety of Ukraine’s Zaporzhzhia nuclear power plant.
  • H.R.3203 (Barr, R-KY) Would impose sanctions on Chinese synthetic opioids.
  • H.R.3202 (Wilson, R-SC) Would prohibit any action to recognize or normalize relations with Syria under Bashar al-Assad. 
  • H.R.3171 (Curtis, R-UT) Would direct the Secretary of State to enter into negotiations with the Taipei Economic and Cultural Representative Office and to rename the office “Taiwan Representative Office”.
  • H.R.3136 (DeLauro, D-CT) Would review U.S. foreign investment in China and other countries that threaten U.S. national security.
  • H.R.3095 (James, R-MI) Would impose sanctions with foreign persons who support and conduct transactions with Iran’s Revolutionary Guard Corps. 
  • H.R.3088 (Fallon, R-TX) Would prevent the Iranian regime from securing funding from international financial institutions.

Senate

  • S.1537 (Hawley, R-MO) Would impose additional duties on U.S. imports from China until U.S.-China trade is balanced.
  • S.1519 (Rubio, R-FL) Would require a U.S. security strategy for the Western Hemisphere. 
  • S.1517 (Duckworth, D-IL) Would expand a cyber cooperation pilot program with Southeast Asia military partners. 
  • S.1513 (Rubio, R-FL) Would direct the Secretary of State to enter into negotiations with the Taipei Economic and Cultural Representative Office and to rename the office “Taiwan Representative Office”.
  • S.1504 (Cotton, R-AR) Would require the Defense Department to assess arms used by Israel.
  • S.1483 (Rubio, R-FL) Would prohibit China and Russia affiliated entities from purchasing certain telecommunications or aerospace goods and services and require reporting relating to foreign investments in the U.S. aerospace industry. 
  • S.Res.202 (Thune, R-SD) Would confront China’s self-designation status as a developing country at the World Trade Organization (WTO).

Upcoming Congressional Hearings

House

Senate

WHO’S WHO

Arrivals

  • Ms. Alexandrine De Bianchi, OSTP Legislative Affairs Director
  • Mr. Arjun Krishnaswam, White House Senior Policy Advisor for Clean Energy Infrastructure
  • Mr. Gordon Trowbridge, Chief of Staff at Office of Representative Elissa Slotkin (D-MI)
  • Ms. Jennifer Littlejohn, Acting Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs
  • Mr. Sam Kuebler, Legislative Director for Representative Maria Salazar (R-FL)
  • Ms. Tracy Carson, Chief of Staff to the U.S. Global AIDS Coordinator and Special Representative for Global Health Diplomacy

Want more scoops on personnel moves? Find the most recent Who’s Who here.

UPCOMING EVENTS

Looking farther ahead? Find the most recent full international events calendar here.

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